Even though he may face a major financial loss, a California homeowner is so fed up with the way speculator-owned rental occupants are destroying the neighborhood that he and his wife are willing to sell short and bring money to the closing table to get out.

Dean Serrano writes Realty Times:

Ms. Evans,

I read your May 24th article and wanted to write back. My wife and I have decided to try our luck and sell the home even though we face the prospect of facing a major financial loss. We are watching our neighborhood deteriorate, which I primarily blame on the renters occupying homes from the speculators, and foresee home prices plunging even further and so we'd like to get out while we can.

We also know that we take the risk of prices going up by spring 2008 but my wife and I have had enough. Our Realtor has brought up the buy-lease option but we are interested in getting this over with and washing our hands clean. We are hoping to take a loss on selling our home but getting ahead by finding another home to buy while it's still a buyer's market.

Let me know what you think. Dean Serrano

Realty Times responds:

Dean, it's time to take matters into your own hands.

One of the recommendations I made to you on May 24th was that you ask your Realtor for comparables and see if he or she would be willing to do a study for you to determine if the homes that are selling for more money near you are owner-occupied or rentals. You can use this information in a letter to your neighborhood landlords, pointing out as nicely as you can that you're all in the same boat in this softer market, but that lack of care by some tenants is causing home values to soften and impact everyone's equity. Ask for the landlords' help in keeping yards and homes in better shape, and you might be surprised. Some may see the wisdom in your logic, especially if they want to sell their investments.

Even though you are planning to sell, this is still a wise move to get this information because it will help you implement your strategy to sell for the highest price you reasonably can.

Knowing that buyers coming into the neighborhood will see what you see and make their offers accordingly, your only defense against the speculator rentals is to have the prettiest, best kept home on the block.

If even one of the landlords takes positive action, based on the heads-up you offered in your letter, all the better.

When you put your home on the market, the speculators will quickly find out what your asking price is, and they will figure out for themselves that you are selling for less than you paid which will impact their home values, too. Once your home sells for less than the speculators paid for theirs, they will quickly realize that allowing property to deteriorate is a costly mistake. With their homes worth less, rents will come down, too.

That's why you may be doing the smart thing to get out of what is a vicious spiral. There's something to be said for peace of mind, and your theory that losing a little on this home will even out when you buy something else is true. You'll come out better on some deals than others.

This time, going in, you can insist that your Realtor or the homeowner's association that oversees the rules of the neighborhood tell you which homes are owner-occupied and which are rentals. Your Realtor can find this information by doing a search in the MLS for past sales and leases, if her MLS offers that service. The HOA can give you that information because most HOAs have rules as to the percentage of homes that must be owner-occupied.

That said, you should know that most states allow property owners to rent their properties if they wish, so there's no guarantee that where ever you move, you won't encounter renters again. That's why you might consider a neighborhood with covenants that prevent people from parking their cars in the yard, hanging tacky art or painting their homes obnoxious colors.

Last, but not least, ask your Realtor to market your home directly to your neighbors. Just as some stock market speculators will buy lower-priced shares in companies whose shares they already own, some property owners may believe they are improving their risk to own a neighboring property at a reduced price. Or, one of the renters may be interested in buying your home.

Thanks for keeping in touch. Let us know what happens.